If there’s one thing we’ve learned during the COVID-19 pandemic, it’s to expect the unexpected. An even better piece of advice might come with an additional clause – “expect and prepare for the unexpected.” During the pandemic, we’ve witnessed untold interruptions to life and business as we know it. Now a year in and with vaccines bolstering efforts to contain the virus, the U.S. economy is on the way to recovery. Five key recommendations will not only help your business recover, but also be ready should another crisis arise.
EVALUATE. Business continuity planning is even more important after surviving a disaster. Even with an existing business continuity plan, you should periodically reassess where your organization, employees, customers and partners stand so that you are always prepared to move forward with precision. Start with some basic, but very relevant questions.
Are our current employees emotionally prepared to resume work at pre-disaster levels or higher?
Do we have enough staff to support business needs now and near-term?
Is there now or will there be pent-up demand for our products and services?
Can partners provide the support needed to quickly ramp up operations? If we don’t have partners, will we need them for the next leg of the journey?
How will we adapt to lingering effects of this or subsequent crises?
What types of business disasters does our insurance cover?
If you don’t have the resources or inventories to quickly respond to market ﬂuctuations, employee needs or customer demands, you’ll want to develop an effective plan to address these gaps.
DIGITIZE. The rapid global spread of COVID-19 led many organizations to suspend normal onsite operations and to implement “shelter-in-place” orders. As a result, these organizations had to ﬁnd new means to conduct business, communicate with staff, and serve customers. Broadband access, e-commerce, remote work tools, video conferencing, and video streaming have proven indispensable in achieving these goals.
Businesses that offer online access – for ordering products and services, managing accounts, etc. – have been able to accommodate changing customer needs and continue operations as well. An online business model offers the “anytime, anywhere” convenience consumers have grown accustomed to.
Employees widely embraced remote work during the COVID-19 contagion, with an early-pandemic survey revealing that 67% of personnel would support an employer’s indeﬁnite work-from-home mandate.1 The respondents didn’t foresee any obstacles to accomplishing business goals. Sixty percent said they could efficiently do their jobs and 50% said they would be equally or more productive than at their normal work location.2
Most companies seem to agree. By late 2020, 56.8% of teams were working remotely at least part time, and managers expect 26.7% of employees will be fully remote in 2021.3 Of course, every employee isn’t a good candidate for remote work. Responsibilities of some roles are best performed onsite. And some employees simply prefer working in the office.
Technology continues to play a signiﬁcant role in business evolution. Whether it’s remote work or an online delivery model, consider which tactics have been successful for your business during the outbreak and which to continue in the “new normal.”
INNOVATE. During the pandemic, we’ve seen transformations in response to need. For example, both large and small businesses mobilized to produce and distribute much-needed supplies to U.S. healthcare workers. Grocers stepped up curbside service, while restaurants focused on drive-through and delivery.
Is there something you’re doing differently as a result of the resulting adverse conditions? Continue to explore opportunities by asking:
How has our customer base changed?
Are there alternate revenue streams we can exploit?
What enhancements or new products can we offer?
Can we widen distribution to serve additional markets? Are there new delivery methods we can use?
Would partnerships with other businesses help to expand our offerings or distribution network?
Most often, challenges present opportunities. Considering new approaches to doing business will not only help you bounce back, but also better prepare you for any bumps ahead.
OPTIMIZE. COVID-19 dealt a crushing blow to the global supply chain, with sobering implications for proﬁtability. During times of upheaval, it’s not only important to focus on inventory, but to also shore up capital.
Cut costs and expenses. When revenue is down, cutting expenses can help to preserve capital. From operating overhead to shipping, take a good hard look at ﬁxed vs. variable costs to determine where cuts can be made. Identify line items that will make a signiﬁcant impact, as well as low-hanging fruit.
Prioritize and negotiate payables as needed. Depending on your business’s cash reserves, it might be necessary to reprioritize invoice payments. Call vendors to discuss whether interim arrangements can be made.
Step up receivables. Calculate and timely collect what is owed you. Can you shorten payment terms or offer discounts for early payment? Bear in mind, you may be asked to extend the same considerations to your customers as you’re asking vendors to extend to you. But it’s important to know how much and when you will be paid. Contact customers to ask about their ability to pay. You should also ask your ﬁnancial institution about tools that can help securely expedite receivables and manage payables.
Identify viable funding options. Understand your liquidity and how much you’ll require to move forward, both short- and long-term. Call your lenders to reevaluate your credit risk and understand the ﬁnancing options – lines of credit, low-interest loans, etc. – available to you. If taking a loan isn’t possible, consider investors or selling shares.
Access to the capital you need is crucial to the success of your business at all times, but especially when you are managing through challenging times.
PROTECT. Unfortunately, fraudsters see the pandemic as an opportunity to steal from businesses and consumers. Seventy-seven percent of respondents in an Association of Fraud Examiner’s survey said they’ve seen an increase since the onset of COVID-19.4 Another 92% expect to see even more fraud over the next year.5 Though there have been many types of theft, cyber fraud has been the most pervasive. Fifty-seven percent of fraud professionals expect that trend to continue over the next year.6
Fraud prevention is an essential element of your business continuity plan. Be sure you continue to apply the tools necessary to protect your networks, communications, e-commerce, banking and other systems.
A holistic approach, in which you efficiently manage inventory, accounting and risk will ensure smoother operations and cash ﬂow during times of adversity. For help with business continuity planning and cash management, contact Synovus Treasury and Payment Solutions, your Treasury Consultant, or Relationship Manager.
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This content is general in nature and does not constitute legal, tax, accounting, financial or investment advice. You are encouraged to consult with competent legal, tax, accounting, financial or investment professionals based on your specific circumstances. We do not make any warranties as to accuracy or completeness of this information, do not endorse any third-party companies, products, or services described here, and take no liability for your use of this information.
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